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THE EUROPEAN CEMENT INDUSTRY IS HIGHLY VULNERABLE TO CARBON LEAKAGE

Date

08 Dec 2008

Sections

Sustainable Dev.

Brussels 8 December 2008 – At a press conference held today CEMBUREAU, the European Cement Association, presented its case regarding the European cement industry’s vulnerability to carbon leakage in relation to the ongoing EU Emission Trading Scheme (ETS) negotiations. In addition, representatives from The Boston Consulting Group (BCG) presented their analysis which highlights the potential impact of the 2013-2020 EU ETS proposal on the European cement industry. This study, requested by CEMBUREAU, concludes that ‘clinker1 and cement production in the EU will be seriously affected by carbon leakage’. As a consequence, the relocation of clinker production to countries with no carbon constraints will accelerate from 2013 and will continue in the following years.

“The European cement industry is highly vulnerable to carbon leakage” stressed Dr Jean-Marie Chandelle, Chief Executive of CEMBUREAU. “This is a fact that should be urgently recognised by the European Union. With full auctioning in 2020 and at CO2 prices of € 35 per tonne, all integrated clinker – cement production in the EU would be wiped out of the EU leading to a loss of approximately 40,000 direct jobs and € 4.2 billion gross value added (GVA) per year. The replacement of domestic
production by imports would also result in increased global CO2 emissions as the European cement industry is demonstrably the best world performer in lowering net CO2 emissions and as a result of extra CO2 emissions from transport. All of this is has been demonstrated by experts.”

The European cement industry, therefore, insists on the following requirements in the hope that these will be addressed in the current debate in the Council, especially in view of the European Council on 11-12 December, and will be taken into account by the European Parliament when voting in plenary on 17 December:

• Urgent recognition that the European cement industry is at high risk of carbon leakage with a decision on sectors qualifying as such by June 2009 at the latest. Subsequent measures to be in
place by June 2010 at the latest.
• The determination of which sectors are vulnerable to carbon leakage should be based on quantitative criteria.
• A CO2 intensity per euro of GVA of 4 kg CO2 should be the leading criterion to determine such vulnerability.
• By default, an increase, direct or indirect, of production cost resulting from the ETS and calculated as a proportion of the GVA (at full auctioning at €30 per tonne of CO2) of at least 30%.
• The quantitative thresholds should be defined in the ETS Directive itself; if this is not the case, they should be defined through comitology. The present focus on carbon leakage criteria must go together with a clear definition of the conditions
to be met by an international agreement in order for it to trigger the consequences foreseen by the Directive, i.e.:
• the participation of countries representing a critical mass (85%) of production in sectors covered by the EU ETS;
• equivalent CO2 emission targets to the EU applicable to the cement industry in those countries;
• similar emission reduction systems with equivalent effect imposed by all participating governments;
• the implementation of measures by the EU to include importers from countries not covered by the international agreement;
• materials in competition with cement and concrete being subject to equivalent restrictions taking into account life cycle aspects.
The European Union is showing the way internationally in the fight against climate change. The European cement industry is supportive of the EU’s efforts in that respect, but Europe must not secure its own targets by relocating the emissions outside its borders, thereby increasing the burden on its neighbours and increasing CO2 emissions globally.

About CEMBUREAU
The European Cement Association based in Brussels is the representative organisation of the cement industry in Europe. Currently, its Full Members are the national cement industry associations and cement companies of the European Union (with the exception of Cyprus, Malta and Slovakia) plus Norway, Switzerland and Turkey. Croatia is an Associate Member of CEMBUREAU.

CONTACT
Jessica JOHNSON, Head of Communications
Tel. : + 32 2 234 10 45 Fax : + 32 2 230 47 20
aj.johnson@cembureau.eu
www.cembureau.eu

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